Evaluating Alternative Notes A borrower has two alternatives for a loan: (1) issue a $270,000, 120-day, 6% note or (2) issue a $270,000, 120-day note that the creditor discounts at 6%. Assume a 360- day year a. Calculate the amount of the Inter Sense for each option $ 5,400 for each alternative b. Determine the proceeds recen ower in each situation. (1) $270,000, 120-day, 6% simple interest (2) $270,000, 120-day note discounted at 6% C. Alternative 1 is more favorable to the borrower since the effective interest rate on alternative 1 is 6% and the effective rate on alternative 2 is 6% Evaluating Alternative Notes A borrower has two alternatives for a loan: (1) issue a $270,000, 120-day, 6% note or (2) issue a $270,000, 120-day note that the creditor discounts at 6%. Assume a 360- day year a. Calculate the amount of the Inter Sense for each option $ 5,400 for each alternative b. Determine the proceeds recen ower in each situation. (1) $270,000, 120-day, 6% simple interest (2) $270,000, 120-day note discounted at 6% C. Alternative 1 is more favorable to the borrower since the effective interest rate on alternative 1 is 6% and the effective rate on alternative 2 is 6%